Related Party Transactions

12 Months Ended

Nov. 30, 2011

Notes to Financial Statements

Related Party Transactions

12. Related Party Transactions

The Company paid fees to a software consulting firm (“Consultant”) of $192,000 and $252,000 in fiscal 2011 and 2010, respectively. All such work performed by the Consultant is the property of the Company. An officer of the Company has performed work for the Consultant, including disbursement services, in which funds that were remitted by the Company to the Consultant were subsequently transferred to a company controlled by the officer to distribute such funds to appropriate vendors. The Company officer received fees from the Consultant of $0 and $55,000 in fiscal 2011 and 2010, respectively.

At November 30, 2011 and 2010, total unpaid salary owed to the Company’s chief executive officer was $244,450 and $306,339, which was converted into unsecured short-term loans bearing interest at 12%. Accrued interest on such loans was $19,840 and $31,575 as of November 30, 2011 and 2010.

Additionally, from December 1, 2009 to November 30, 2010, the Company’s chief executive officer provided funding to the Company in the amount of $342,000. Of such amount, $188,000 was converted into common stock and $153,000 was provided as unsecured short-term loans bearing interest at 24%. Accrued interest on such loans was $26,483 as of November 30, 2010. During the fiscal year ended November 30, 2011, the Company’s chief executive officer provided an additional $417,280 in funding to the Company. Of the opening balance of $153,000 and the $417,280 provided in fiscal 2011, $337,000 was converted to common stock or sold to a non-affiliated investor, leaving an unsecured short-term loan balance of $233,280. Accrued interest on such loans was $29,953 as of November 30, 2011.

The Company also owes its chief executive officer $109,222 and $117,764 for unreimbursed business expenses, which are included in the Company’s accounts payable balance as of November 30, 2011 and 2010.